Business Competitiveness: A Little Competition brings in Big Bucks
Sharee Steed
Professor Parren Shannon, JD
BUS 508
July 22, 2013

Question # 1-Detemine how each corporate culture differs from the other.
When starting a business you as the owner should always have a strategy that sets you apart from competing vendors. What makes your company differ from the others and what would you like consumers to know that set you apart. In today’s market competition is always a factor but it does not necessarily have to be a bad thing; there are advantages to having a competitor. Developing strategies for your competitor is key, “The underlying goal of strategy development is competitive differentiation,” (Kurtz, 2012, p. 230). The companies presented below demonstrate the perfect example of business competition. The home improvement industry has been experiencing rapid growth since the late 70’s. Due to the capital effect, consumers would spend high amounts of cash and credit on improving their most prized and expensive possession, their homes. As a result, the home improvement industry experienced quick development and progress. This is what led to the opening of two mega home improvement stores known as The Home Depot and Lowes Companies, INC. The Home Depot which was founded, “1978 in Atlanta, Georgia and has since become the world's largest home improvement retailer, operating more than 1,500 stores”, (Brumley, 2012). Although not as international as its competitor Home Depot, Lowes is a “$26 billion retailer of a complete line of home improvement products and equipment. The company serves more than seven million do-it-yourself and commercial business customers each week through 875 stores in 45 states,” (Brumley, 2012). The difference between a Lowe's store and a Home Depot has been fairly clear-cut up to now. Presentation counts at Lowe's. Its warehouse-style stores are laid out so that two shopping carts can pass in comfort, a feature that has helped Lowe's appeal to women shoppers. Lowe's is also focusing more on higher-margin goods. Home Depot, meanwhile, has traditionally relied on low prices, lots of selection, and sales of building materials to professional contractors.
Question # 2- Analyze three (3) ways that each unique culture has benefited by the other’s competition.
Home Depot’s key success factors are excellent management, competitive prices, superior customer service, full range of product and expansive distribution networks. Lowe’s is targeting the customers who remain interested in shopping for big ticket appliances and high margin home furnishings at all their retail stores. Lowe's is pushing hard for growth to catch up to home depot. Home Depot was the most successful retailer for the home improvement industry. However, starting from the end of the 90’s Lowe’s has adapted a very aggressive and risky strategy of rapid expansion especially in Home depot’s own turf. This benefited Lowes because Lowe's moves into bigger metro markets, providing them with a new type of consumer. The culture of Home Depot is referred to as “orange blooded, expressing the company colors and commitment. This orange blooded culture was formed to encourage involvement, passion, and respect for not only the company, but other areas of life such as volunteering and giving back,” (Goodfellow, 2013). Home Depot has benefited by Lowe’s competition because it has cause them as a corporation to down size their retail stores making it more relatable to do it yourself consumers . Home Depot is apparently fighting Lowes every step of the way, “Home Depot has cut back its overall expansion pace. Some of those new stores are smaller "neighborhood" units, designed for urban markets,” (Brumley, 2012).
Question #3- Speculate how each would continue to thrive if its current corporate culture would need to change in the near future.
Given that the home improvement industry is still growing and the help of a growing housing market improve. The home improvement industry will enjoy satisfying growth level as the number of homeowners may increase in the United States making the key factors very important to the future of Home depot and its competitor Lowes. If the mortgage rates, growing population, and increase personal income increase in the next five years this can make a difference in which company would succeed over the other. Besides, focusing on the competitive pressures from Lowe’s, Home Depot has excellent performance and it should be able to maintain this in the future. It has the “highest margins and value in the home improvement industry. The company was very attractive to consumers in 90’s but unless it adapts more aggressive growth strategies it will have difficulties of attracting future consumers with its steady but slow growth,” (Lahart, 2012). Lowe’s has caught a lot of attention in the investor community with the help of his impressive performance in the recent years. Though it has grown a lot, it is still the half the size of Home Depot. To keep growing at this pace, though, Lowe's has to battle Home Depot on its home turf. The two giants have largely avoided going head to head, with Home Depot aiming major “metropolitan markets nationwide and Lowe's focusing on mid-size cities in the South and Mid-Atlantic. Two years ago, however, Lowe's began pushing into larger markets, starting with successful raids into Depot strong holds like Atlanta and Dallas,” (Goodfellow, 2013). With that being said each company can maintain their corporate culture while not affecting the other. If each company continues to target a certain type of consumer, this only make their future thrive even more.

References

Brumley, J. (2012, August 21). stocks to buy. Retrieved July 20, 2013, from http://www.investorplace.com/: http://investorplace.com/2012/08/home-depot-vs-lowes-its-no-contest/
Goodfellow, P. (2013, april 5). Prosper Now. Retrieved July 20, 2013, from http://www.forbes.com/: http://www.forbes.com/sites/prospernow/2013/04/15/if-lowes-wants-to-get-serious-about-home-depot-itll-have-to-man-up/
Kurtz, D. L. (2012). Contemporary Business. New Jersey: John Wiley and Sons, Inc.
Lahart, J. (2012). Wall Street Journal - Eastern Edition Vol: 259 Issue: 131. Lowe's Still Needs Repair to Compete With Home Depot, 16.